Union Budget of India Glossary Explained

here is a glossary of terms related to the Union Budget of India, including an explanation and example for each term:

Union Budget: The annual financial statement of the Indian government, outlining its estimated receipts and expenditures for the fiscal year. It is presented to the Parliament by the Finance Minister.
Gross Fiscal Deficit: The difference between the government’s total expenditure and its total receipts (excluding borrowings). It indicates the amount of money the government needs to borrow to finance its spending.
Revenue Deficit: The excess of revenue expenditure over revenue receipts. It shows the extent to which the government’s day-to-day operations are being financed through borrowing rather than taxation.
Primary Deficit: The fiscal deficit minus interest payments. It indicates the amount of borrowing required to finance government spending, excluding interest payments on past debt.
Direct Taxes: Taxes levied directly on individuals and corporations, such as income tax and corporate tax.
Indirect Taxes: Taxes levied on goods and services, such as GST and customs duty.
Tax Revenue: The income earned by the government through taxation, including both direct and indirect taxes.
Non-Tax Revenue: Revenue earned by the government from sources other than taxes, such as dividends, interest, and fees.
Capital Expenditure: Spending on creating assets like roads, railways, and other infrastructure.This creates or reduces the government’s assets/liabilities. It includes expenditure on asset acquisition, loans, and advances granted by the Centre.
Revenue Expenditure: Spending on the day-to-day running of the government, including salaries, pensions, and subsidies.Incurred for the normal running of government departments and services, interest payments on debt, subsidies, etc. These don’t necessarily result in asset creation.
Plan Expenditure: Expenditure on developmental activities, such as infrastructure projects, social welfare programs, and subsidies.
Non-Plan Expenditure: Expenditure on items that are recurring in nature, such as salaries, pensions, and interest payments.
Subsidies: Financial assistance provided by the government to individuals or industries to reduce costs and encourage consumption or production.
Disinvestment: The sale of government-owned assets or stakes in public sector undertakings.

Gross Domestic Product (GDP): The monetary value of “final” goods and services produced within a nation’s geographies in a given period. It includes market and some no-market production (defense, education, health) but excludes unpaid work and black-market activities. Wear and tear of capital stock are considered.
Nominal and Real GDP: Nominal GDP reflects the current value of the currency, unadjusted for inflation/deflation. Real GDP adjusts for inflation/deflation, providing a clearer picture of economic growth.
Utility of Nominal GDP: Used to compare a nation’s output with other factors not adjusted for inflation, like public debt, budget deficits/surplus, current account status, and tax collected. It’s the basis for ranking India as the world’s fifth-largest economy.
Finance Bill: Presented with the Annual Financial Statement, it details the imposition, abolition, remission, alteration, or regulation of taxes proposed in the Budget. It’s a Money Bill as defined in Article 110 of the Constitution.
Capital & Revenue Receipts: Capital receipts include market borrowings, loans, and non-debt receipts (like disinvestment proceeds). Revenue receipts are mainly tax and non-tax revenues (interest, dividends, service receipts).
Tax Revenue: Revenue from taxes on income and profits (direct taxes) and on consumption of goods and services/transactions (indirect taxes). It’s the main source of government revenue.
Revenue Deficit/Surplus: The excess of revenue expenditure over revenue receipts is a deficit; the reverse is a surplus.
Gross and Net Tax Receipts: Gross tax receipts are taxes collected net of refunds. Net tax receipts are inflows into the Union Budget after mandatory devolution to states.
Fiscal Policy/FRBM Act: The Fiscal Responsibility and Budget Management Act, 2003 lays out India’s fiscal policy, aiming for reasonable public debt levels and conditions for private enterprise.t.